By: Jessica Shorten
CONROE, TX – Things were heated during Day 1 of budget workshops in Montgomery County after a proposal for a 5% salary increase for all employees and an attempt to rush through the budget process.
This year’s budget workshop seemed to be off to a good start with Tax Assessor-Collector Tammy McRae bringing the news that certified home values had increased by nearly 8% in market value, and 8.4% in taxable value. Meaning, the County would see a significant bump in general revenues in fiscal year 2022 even at the “No New Revenue” tax rate calculated at .4083 cents per $100 of property value.
However, the discussion quickly took another turn after Precinct 3 Commissioner James Noack announced he would seek “nothing less than” a 5% across the board salary increase for all employees; on top of salary increases already handed out just earlier that morning for members of his own staff and the new Associate Judge for CCL3.
“In the last three years, our employees have received a 1.9% raise, and that’s pretty much everybody…and that’s just not acceptable,” said Commissioner Noack. Stating a number of municipalities and counties are also giving large raises this year to employees and claimed a number of department heads have agreed to forego a number of requests in lieu of a 5% raise across the board for all employees.
Noack continued, “They’ve earned it, this isn’t a gift. This is something that these men and women deserve and I’m not going to settle for anything less than [5%].”
County Judge Mark Keough was the first to argue setting such a high percentage before going through budget expenses, “How can we give raises already when we don’t even know what the total budget’s going to be and expenditures in each of the departments?”
To give a 5% raise across the board would cost $7,010,000 to the county’s general fund according to Budget Director Amanda Carter. An amount which would spend the amount of extra revenue brought in from property taxes to the point fund balance would be needed to cover contributions to the capital improvement fund and overlay expenses.
Commissioner Noack suggested each Commissioner use $200,000 out of each of their Road and Bridge budgets in order to cover the raise, stating, “We’d be the heroes taking care of the employees.”
However, Judge Keough pointed out that Noack has given raises to his department’s employees consistently over the past three years even when no countywide raises were given out to employees. In this budget cycle, Noack pushed through another round of raises for his employees before requesting an additional 5% raise for all county employees, including those who have already received salary increases.
Keough was correct, the two Precinct 3 employees who received raises earlier Tuesday morning have an unusual salary history because they have received considerably more than a 1.9% increase over the last 3 years.
County Judge Keough stated, “Amanda [Carter], as always don’t include me [in any raises],” keeping his promise to reduce his salary when he took office and maintaining the same salary throughout his term in office.
Despite the potential increase in property tax revenue for Montgomery County, adding 5% raises to the preliminary funding factors will use all of the available revenue created under a “No New Revenue” tax rate instead of passing that savings on to taxpayers, Noack was adamant he would pursue a minimum of 5% increase in salaries across the board even if it meant using fund balance where necessary.
County Auditor Rakesh Pandey projected fund balance throughout Day 1 of the budget workshop. Some of the suggestions would result in an unassigned fund balance of approximately $45 million, while other options would result in a $60 million unassigned fund balance.
The Government Finance Officers Association recommends best practices of a minimum of two months of operating expenses in unassigned fund balance. If the county is subject to natural disasters, they recommend increasing the fund balance for the appropriate level of risk. Two months would mean 16.67% of annual operating expenses in unassigned fund balance. The Court’s target today was 15% unassigned fund balance.
Even though the county’s fund balance policy is 10%-15% of annual operating expenses in unassigned fund balance, even Noack commented that he would be more comfortable at 15%-20% unassigned fund balance, although no one suggested revising the county’s fund balance policy.
Budget workshops resume at 9:00 a.m., Wednesday, July 27, 2021 where Budget Director Amanda Carter will update the net effect of the proposed changes and the Court will continue to hearing from Department Heads.
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